Whether you are looking to purchase a new home, renovate an existing one or start from scratch, a code compliance certificate will be an important step in the process. This article addresses some of the common questions relating to code compliance certificates.
What is a Code Compliance Certificate?
A code compliance certificate confirms that any building work done on a property complies with the relevant building consent and the Building Code. The local territorial authority (city or district council) has the power to issue the certificate following the final inspection of the building. Any code compliance certificate issued for a property will be recorded in the Land Information Memorandum (LIM) for that property.
When do I need a Code Compliance Certificate?
Before starting any building work on your property you need to find out whether a building consent is required and if so, obtain the building consent from the local council. You need to start the work within 1 year of the building consent being granted and also apply to council for a code compliance certificate within 2 years of the building consent being granted (although you can apply for an extension if required). The Building Act 2004 requires the council to issue a code compliance certificate within 20 working days of the application if it is satisfied that the work complies with all requirements.
When building a house, receiving the final code compliance certificate is also often a condition of lending and the bank may require the certificate to be issued before releasing the final funds to complete the project.
What happens if I buy a property without a Code Compliance Certificate?
Owning a property without any required code compliance certificate may affect the property value and your ability to sell the property. It may also affect your ability to insure the property and borrow money against the property, depending on the extent of work done.
If you are buying a new home, make sure you check that a code compliance certificate has been issued for any work on the property that requires building consent. If you are building your own home, make sure the builder or developer obtains the code compliance certificate before you pay the final instalment for your new home.
It is an offence for a developer to transfer ownership of a house without a code compliance certificate. However, it is possible for the developer to contract out of this requirement if the purchaser agrees, so if you are buying a new home in a development you should check the sale and purchase agreement to make sure this requirement is not removed.
You should always consult an experienced property lawyer when purchasing or building a new property. Our property team would be happy to assist you with any potential purchase or any queries you have about code compliance certificates or other property matters.